What is weighted average in SAP FS-CM - Claims Management?

SAP Term: weighted average

• Component: FS-CM

• Component Name: Claims Management

• Description: Amount for the ULAE reserve that is determined statistically. This value is determined at the lowest level of detail from historical data, in other words from amounts that have already been paid in periods in the past. The coverage is part of the detail, but no differentiation is made by loss/claim years. In a second step this amount is aggregated at company code level. Per reserve group it is then possible to estimate the percentage share of such a reserve in the entire company code.

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• Key Concepts: 
  Weighted average is a calculation used in FS-CM Claims Management to determine the average cost of a claim. It takes into account the number of claims and the total cost of those claims. The weighted average is calculated by dividing the total cost of all claims by the total number of claims. 
  
  How to use it: 
  Weighted average can be used to determine the average cost of a claim in FS-CM Claims Management. To calculate the weighted average, divide the total cost of all claims by the total number of claims. This will give you the weighted average cost per claim. 
  
  Tips & Tricks: 
  When calculating the weighted average, make sure to include all costs associated with each claim, such as administrative costs, legal fees, and other expenses. This will ensure that you get an accurate representation of the average cost per claim. 
  
  Related Information: 
  Weighted average can also be used to calculate other metrics in FS-CM Claims Management, such as the average time to process a claim or the average amount paid out on a claim. Additionally, weighted averages can be used to compare different types of claims and their associated costs.